For more than seven decades, studios weren’t allowed to own exhibition company under the Paramount Consent Decrees, which were rescinded in 2020.
In groundbreaking moment, Sony Pictures has acquired Alamo Drafthouse Cinema in deal that puts a major Hollywood studio back in the business of owning movie theater for the first time in 75 years.
From 1948 until 2020, the U.S. Department of Justice prohibited film distributors from owning exhibition company under what was known as the Paramount Consent Decrees, which arose from a 1948 U.S. Supreme Court ruling.
The decrees dismantled the old Hollywood studio system by forcing the majors to divest of their theater holdings.
Sony is the first major Hollywood studio to test the waters since the decrees were rescinded.
Alamo filed for Chapter 11 bankruptcy protection in 2021, while still reeling amid the COVID-19 pandemic. Altamont Capital, Fortress Investment Group and League became its owners post-bankruptcy.
Alamo is hardly the only exhibitor that considered bankruptcy in the aftermath of pandemic and writers and actors strikes, which have slowed the content process.
Alamo Drafthouse, independent chain with 35 locations, will continue to be run by Alamo CEO Michael Kustermann, under a new division, Sony Pictures Experiences. The deal reinforces its long-held commitment to theatrical exhibition and initiatives in experiential entertainment.
“We are excited to make history with Sony Pictures Entertainment and have found the right home and partner for Alamo Drafthouse Cinema,” said Kustermann. “We were created by film lovers for film lovers. We know how important this is to Sony, and it serves as further evidence of their commitment to the theatrical experience. Together we will continue to innovate and bring exciting new opportunities for our teammates and moviegoers alike.”
Tom Rothman, chair and CEO of Sony Pictures Motion Picture Group added: “Alamo Drafthouse has always held the craft of filmmaking and the theatrical experience in high esteem, which are fundamental shared values between our companies. I’m jazzed that our company is doing this.”
Alamo will continue to operate all 35 of its cinemas across 25 metro areas under the Alamo Drafthouse brand.
The Alamo Drafthouse-owned Fantastic Fest, the world-renowned genre film festival, is included in the acquisition and will continue to be operated by Alamo Drafthouse. The company’s headquarters will remain in Austin, Texas.
Alamo Drafthouse was founded in 1997 by Tim and Karrie League as a single-screen repertory theater in Austin, Texas, and has grown into thriving and dynamic dine-in cinema chain, beloved by fans and industry alike.
SPE acquired Alamo Drafthouse from owners Altamont Capital Partners, Fortress Investment Group and founder Tim League. Goldman Sachs & Co. LLC acted as exclusive financial adviser to Alamo Drafthouse in the transaction.
Will Alamo be able to keep its independent spirit now that it’s under major studio ownership?
Alamo, which operates theaters in 14 states, is the only theater chain in the country with specific personality, rooted in a single-room theater in downtown Austin.
